(part 2 of 4)
In our previous blog piece on Colonel John Boyd’s ‘OODA loop’ we identified how the first step, Observe, can improve and speed up your business decision-making by helping you react and respond effectively to change.
In Step 2: Orientation we’ll show you how to improve your extrapolation skills.
Step 2: Orientation
Orientation is all about understanding. What does your data tell you? What questions should you ask to interrogate your business operations? What opportunities is your business missing out on? If Step 1: Observe is about gathering your data, Step 2: Orient is all about giving that data meaning, and working out what the data is trying to tell you.
In the process of Orientation you may realise that you’re missing information – your data resources can’t answer the questions you need to ask the business. This good! Progressing through the OODA process helps you uncover those important ‘unknown unknowns’, enabling you to get as complete a picture of your business as possible. Identifying what you don’t know gives you the opportunity to improve your insight.
Orientation, then, is about understanding. Using our fighter pilot example, orientation might be things like assessing how their opponent is moving, noticing things that are different to expectations, like weather patterns, or identifying unexpected readings from their jet controls.
In your data-driven business, orientation will be about identifying what you know, putting what you know in context, and understanding how to use that data to generate new ideas.
Step 1: Observe used the example of a business operating in B2B telephone sales. Let’s suppose that the business has historically targeted a certain sector, but now wants to use data to explore other markets. Step 2: Orient allows you to identify that:
- Targeting certain other sectors has a better conversion rate
- Changes in the calling script make for an easier sale
- Selling to businesses with a higher credit rating positively impacts your cashflow.
This is the time when using analytics tools or creating predictive models to help you work out which of your metrics are important will make a difference, because what you think you know may be wrong. John Boyd considered ‘Orient’ to be the most important step in the OODA loop, because it encourages mental agility and a constant updating of mental models. In becoming a data-driven business, how easily you are able to adapt your modelling and planning to changing conditions will determine your success.
Any successful business knows ‘what works’ – if they didn’t, they wouldn’t remain in business. The challenge is asking ‘what else might work?’, or ‘what are we missing?’, or even ‘where are we leaving value on the table?’ and using your data resources to provide the answers.
Your business may have become successful within a particular sector, or you’ve always used the same set of tools in a particular way, and this can lead to a narrow focus on selling to the same customers, using the same tools and missing the opportunity to grow. The problem with that approach is that by limiting your focus you’re cutting yourself off from better ways of doing things and new opportunities.
In Clayton Christensen’s business book classic, The Innovator’s Dilemma, he explains how this works in the technology industry: innovative, successful disk drive companies failed because they listened to their customers and kept improving their products. This sounds counter-intuitive, but his point is that while sticking to those mental models, those companies failed to adjust to new opportunities and ideas and failed because of it.
To recap, by the end of this step you should have a grasp of what is happening in your business and its industry, and an understanding of your customers. Based on that, you’ll be finding that ideas for improvement and things to try come naturally.
Your Orientation step helps you to understand the resources you have, the resources you need, and what questions to ask the business to improve data-driven decision making. Following the OODA loop will help your business become agile – able to understand and incorporate change to your competitive advantage.
In 2018, all businesses are data businesses. Make sure you’re using your data effectively to help you reach your business goals.
In the next entry in the series, we’ll be talking about Deciding: what the data you’ve just gathered is trying to tell you.